Weekly Review: Index continues to climb despite political hurdles
Strong foreign buying and positive sector-specific news contribute to market’s growth.
Strong foreign buying and positive sector-specific news contribute to market’s growth.
KARACHI:
The stock market again put in a stellar performance and climbed for the third week in a row as a flurry of positive news outweighed negative political developments, leading to an increase of 718 points (3.2%) in the benchmark KSE 100-share index during the week ended November 8.
The market’s growth came despite negative political developments following the killing of Tehreek-e-Taliban Pakistan (TTP) chief as strong foreign buying along with positive news flow for the fertiliser and textile sectors provided a boost to investor sentiments.
The week started off on a negative note after the TTP chief was killed over the weekend in a drone strike by the United States. The killing sparked political outrage as ruling parties were hoping to engage in peace talks with the militants.
Tensions came to a head with the Khyber-Pakhtunkhwa government announcing that it would block supply routes for Nato trucks passing through the province to Afghanistan. Investors feared this would strain relationship with the United States and put foreign aid in jeopardy. As a result, the KSE-100 index fell 271 points (1.2%) on Monday.
However, as the week passed and tensions simmered down, a flurry of positive sector-specific news along with sustained foreign buying helped the index overcome its losses and close the week at 23,367 points.
The fertiliser sector took centre stage as it emerged that the Economic Coordination Committee was likely to approve supply of 130 million cubic feet of gas per day (mmcfd) from OGDC’s Kunnar Pasakhi field to the fertiliser plants to boost the country’s urea production.
Furthermore, with the Initial Public Offering (IPO) of Engro Fertilizer likely to take place before the end of the year, investors rallied towards Engro Corporation’s stock, which closed the week with a gain of 11.9% over the previous week.
Another solid development came for the textile sector after the International Trade Committee of the European Union agreed to grant GSP Plus status to Pakistan allowing duty-free export of textile items to the EU.
The EU parliament will give final ratification on December 6 and the scheme will come into force from January 1, 2014. Textile stocks received a major boost on the news with Nishat Mills and Nishat Chunian leading the way with a weekly gain of 9.9% and 5.5% respectively.
Foreign buying also played its role in the market’s strong performance and foreigners bought net equity worth $8.3 million. Last three weeks have seen a net foreign inflow of $55 million into the stock market.
Average trading volumes were up 9.5% and stood at 126 million shares per day. Average daily value also climbed 19.5% and stood at Rs5.73 billion. Market capitalisation totalled Rs5.53 trillion at the end of the week.
Winners of the week
Jahangir Siddiqui and Company
Jahangir Siddiqui and Company is an investment company offering share brokerage, money market, advisory and consultancy, underwriting and portfolio management services.
JS Bank
JS Bank is a full service commercial bank. The bank provides a wide range of banking products and services including retail and consumer, treasury, corporate and commercial, and investment banking.
Engro Corporation
Engro Corporation produces fertilisers, polyvinyl chloride resin, and industrial automation products, develops electricity generating plants, produces dairy foods, and operates a liquefied petroleum gas and liquid chemical terminal.
Losers of the week
Faysal Bank
Faysal Bank Limited provides commercial, consumer and investment banking services.
Shifa International Hospitals Limited
Shifa International Hospitals Limited establishes and runs medical centres and hospitals in Pakistan. The company’s clinical services include medicine, pediatrics, surgical, obstetric and gynecology, dentistry, rehabilitation services and ophthalmology. Shifa also provides diagnostic services including specialised diagnostics, radiology and clinical laboratory.
Pakistan International Container Terminal
Pakistan International Container Terminal operates a container shipping facility in Karachi, Pakistan.
Published in The Express Tribune, November 10th, 2013.
The stock market again put in a stellar performance and climbed for the third week in a row as a flurry of positive news outweighed negative political developments, leading to an increase of 718 points (3.2%) in the benchmark KSE 100-share index during the week ended November 8.
The market’s growth came despite negative political developments following the killing of Tehreek-e-Taliban Pakistan (TTP) chief as strong foreign buying along with positive news flow for the fertiliser and textile sectors provided a boost to investor sentiments.
The week started off on a negative note after the TTP chief was killed over the weekend in a drone strike by the United States. The killing sparked political outrage as ruling parties were hoping to engage in peace talks with the militants.
Tensions came to a head with the Khyber-Pakhtunkhwa government announcing that it would block supply routes for Nato trucks passing through the province to Afghanistan. Investors feared this would strain relationship with the United States and put foreign aid in jeopardy. As a result, the KSE-100 index fell 271 points (1.2%) on Monday.
However, as the week passed and tensions simmered down, a flurry of positive sector-specific news along with sustained foreign buying helped the index overcome its losses and close the week at 23,367 points.
The fertiliser sector took centre stage as it emerged that the Economic Coordination Committee was likely to approve supply of 130 million cubic feet of gas per day (mmcfd) from OGDC’s Kunnar Pasakhi field to the fertiliser plants to boost the country’s urea production.
Furthermore, with the Initial Public Offering (IPO) of Engro Fertilizer likely to take place before the end of the year, investors rallied towards Engro Corporation’s stock, which closed the week with a gain of 11.9% over the previous week.
Another solid development came for the textile sector after the International Trade Committee of the European Union agreed to grant GSP Plus status to Pakistan allowing duty-free export of textile items to the EU.
The EU parliament will give final ratification on December 6 and the scheme will come into force from January 1, 2014. Textile stocks received a major boost on the news with Nishat Mills and Nishat Chunian leading the way with a weekly gain of 9.9% and 5.5% respectively.
Foreign buying also played its role in the market’s strong performance and foreigners bought net equity worth $8.3 million. Last three weeks have seen a net foreign inflow of $55 million into the stock market.
Average trading volumes were up 9.5% and stood at 126 million shares per day. Average daily value also climbed 19.5% and stood at Rs5.73 billion. Market capitalisation totalled Rs5.53 trillion at the end of the week.
Winners of the week
Jahangir Siddiqui and Company
Jahangir Siddiqui and Company is an investment company offering share brokerage, money market, advisory and consultancy, underwriting and portfolio management services.
JS Bank
JS Bank is a full service commercial bank. The bank provides a wide range of banking products and services including retail and consumer, treasury, corporate and commercial, and investment banking.
Engro Corporation
Engro Corporation produces fertilisers, polyvinyl chloride resin, and industrial automation products, develops electricity generating plants, produces dairy foods, and operates a liquefied petroleum gas and liquid chemical terminal.
Losers of the week
Faysal Bank
Faysal Bank Limited provides commercial, consumer and investment banking services.
Shifa International Hospitals Limited
Shifa International Hospitals Limited establishes and runs medical centres and hospitals in Pakistan. The company’s clinical services include medicine, pediatrics, surgical, obstetric and gynecology, dentistry, rehabilitation services and ophthalmology. Shifa also provides diagnostic services including specialised diagnostics, radiology and clinical laboratory.
Pakistan International Container Terminal
Pakistan International Container Terminal operates a container shipping facility in Karachi, Pakistan.
Published in The Express Tribune, November 10th, 2013.